8.7 Operating Profit Margin Analysis Template

What is the Operating Profit Margin ratio template and why is it important in a business plan for a small business like Central Plumbing & Heating Inc.?

The Operating Profit Margin ratio template gives a small business owner like Felix Gonzalez the ability to show the readers of the business plan just what the the projected Operating Profit margin ratio will be for a small business like Central Plumbing & Heating Inc. over the three years for which the financials are being projected. The Operating Profit Margin ratio is a ratio of the Operating Income of the small business to the sales / revenues of the small business.

The operating income is of course derived by subtracting the operating expenses from the gross profit for the small business. The advantage of this template is that it gives the reader a clear look at the Operating Profit Margin Ratio in both graphic and numerical formats.

What calculations go into the Operating Profit Margin ratio Template for a Plumbing and Heating Contractor business?

All that a small business owner like Felix Gonzalez has to do is to input the two components of the ratio into the input sheet of the template - Operating Income and Sales for the three years for which the financials are being projected. The template does the rest by automatically calculating the ratios and updating the charts. You can click on the output tab and from there copy and paste the output directly into the business plan word document.